Reading the mail he uploaded from PayPal, it sounds like this is the direct result of a Singaporean financial law. PayPal has to obey the laws in each country it operates in like any other business. If Singapore doesn't allow them to collect donations for non-charity organizations, then they can't. It is neither fair to blame PayPal for that nor to generalize it as a concerted effort to damage all open source projects.
This is the same kind of reaction people had when India blocked PayPal from operating normally (in terms of bank transfers) until it complied with some bank regulations there. Indians blamed PayPal when it was their own government creating the barriers.
You are probably right, and PayPal are probably opnly doing what they think they must.
However:
1. people are getting screwed when it's not really their fault
2. PayPal respond slowly and badly in cases like this
3. you can lose a lot of money with no recourse.
TANSTAAFL. Several groups I work with have repeatedly said they want the convenience of having people pay by using PayPal. I have now put together a standard response with the evidence of cases like this. I specifically require written confirmation that they, the customer, is stating that I must provide the PayPal option, and that they have read the documentation I provided.
FWIW, personally, I get people to send me a check or transfer money by BACS (direct bank-to-bank transfer). This is entirely within a single country, so it works.
This is the same kind of reaction people had when India blocked PayPal from operating normally (in terms of bank transfers) until it complied with some bank regulations there. Indians blamed PayPal when it was their own government creating the barriers.